The Commodities Futures Trading Commission (CFTC) Chairman, Rostin Behnam, has accused Binance, the world’s largest cryptocurrency exchange, of intentionally breaking CFTC rules. Speaking at an event hosted by Princeton University, Behnam said that Binance had failed to comply with US derivatives regulations, including failing to keep Americans off its exchange as promised and not registering with the regulator. The CFTC last month accused Binance of “sham” compliance with US derivatives regulations. Binance has said that it was disappointed by the suit and would continue to work with the regulator.
The CFTC is one of several US bodies that have been investigating Binance’s activities. The Internal Revenue Service, as well as federal prosecutors, have been examining Binance’s compliance with anti-money laundering obligations. The Securities and Exchange Commission has been scrutinizing whether the exchange has supported the trading of unregistered securities.
Behnam also reiterated that the second-largest cryptocurrency, Ether, as well as stablecoins are commodities. Although US regulators generally agree that Bitcoin, the biggest token, is a commodity, there’s more ambiguity around which other virtual coins should be considered securities under American law and face the SEC’s tough investor-protection rules. The SEC has taken a range of actions against major crypto firms, including a $30 million settlement with the exchange known as Kraken over its staking program.
Staking is a crypto offering that lets users generate yields in return for allowing their tokens to be used to facilitate transactions on a blockchain. SEC Chair Gary Gensler has said that the case should put the industry on notice and has said that a range of digital assets resemble unregistered securities.
Binance, which has been under scrutiny from regulators around the world, has been accused of regulatory violations in the US. The CFTC’s accusations are among the most serious yet, and could lead to significant fines and other penalties for the exchange. The exchange has said that it will work with regulators to address any concerns they may have. However, the CFTC has said that Binance has failed to comply with US derivatives regulations, including failing to keep Americans off its exchange as promised and not registering with the regulator.
The CFTC’s accusations are part of a wider crackdown on crypto firms by US regulators. The Internal Revenue Service and federal prosecutors have been examining Binance’s compliance with anti-money laundering obligations, while the SEC has been scrutinizing whether the exchange has supported the trading of unregistered securities. The SEC has taken a range of actions against major crypto firms, including a $30 million settlement with the exchange known as Kraken over its staking program.
The CFTC’s accusations are likely to lead to further scrutiny of Binance’s activities by regulators around the world. The exchange has been under investigation by regulators in several countries, including the UK, Japan, and Canada. The accusations are also likely to raise questions about the regulation of cryptocurrencies more broadly, and could lead to increased calls for tighter regulation of the industry.
